XML 26 R11.htm IDEA: XBRL DOCUMENT
v3.24.3

Current Expected Credit Losses ("CECL") | 9 Months Ended
--- | ---
Sep. 30, 2024
Credit Loss [Abstract] |
Current Expected Credit Losses ("CECL") | Current Expected Credit Losses (“CECL”) The CECL reserve methodology requires companies to measure expected credit losses on financial instruments based on the total estimated amount to be collected over the lifetime of the instrument. Under the CECL model, reserves may be established against financial asset balances even if the risk of loss is remote or has not yet manifested itself. The Company records specific reserves against account balances of franchisees deemed at-risk when a potential loss is likely or imminent as a result of prolonged payment delinquency (greater than 90 days past due) and where notable credit deterioration has become evident. For financial assets that are not currently deemed at-risk, an allowance is recorded based on expected loss rates derived pursuant to the Company's CECL methodology that assesses four components - historical losses, current conditions, reasonable and supportable forecasts, and a reversion to history, if applicable. The Company considers its portfolio segments to be the following: Accounts Receivable Most of the Company’s short-term receivables due from franchisees are derived from royalty, advertising, and other franchise-related fees, and from distributors related to the sale of proprietary products to franchisees through the Company’s network of suppliers and distributors. Gift Card Receivable Gift card receivable consist primarily of amounts due from third-party vendors. Receivables related to gift card sales are subject to seasonality and usually peak around year-end as a result of the December holiday season. Notes Receivable Notes receivable balances primarily relate to the conversion of certain past due franchisee accounts receivable to notes receivable, cash loans to franchisees for working capital purposes, a note receivable in connection with the sale of IHOP company restaurants, franchise fees, and other notes. The notes are typically collateralized by the franchise. During the nine months ended September 30, 2024, the Company wrote off $4.4 million of Applebee's notes receivable which were fully reserved. The remaining notes have reserves recorded against them amounting to $0.7 million as of September 30, 2024. Equipment Leases Receivable Equipment leases receivable primarily relate to IHOP franchise development activity prior to 2003 when IHOP typically leased or purchased the restaurant site, built and equipped the restaurant, then franchised the restaurant to a franchisee. Equipment lease contracts are collateralized by the equipment in the restaurant. The estimated fair value of the equipment collateralizing these lease contracts are not deemed to be significant given the very seasoned and mature nature of this portfolio. The weighted average remaining life of the Company’s equipment leases is 2.7 years as of September 30, 2024. Real Estate Leases Receivable Real estate leases receivable primarily relate to IHOP franchise development activity prior to 2003 when IHOP provided the financing for leasing or subleasing the site. Real estate leases at September 30, 2024 comprised of 17 leases with a weighted average remaining life of 10.7 years, and relate to locations that IHOP is leasing from third parties and subleasing to franchisees.
|  | September 30, 2024 |  | December 31, 2023
|  | (In millions)
Accounts receivable |  | $ | 70.2 |  |  | $ | 73.3 |
Gift card receivable |  | 6.2 |  |  | 33.6 |
Notes receivable |  | 9.0 |  |  | 15.0 |
Financing receivable: |  |  |  |
Equipment leases receivable |  | 14.8 |  |  | 19.7 |
Real estate leases receivable |  | 18.7 |  |  | 18.4 |
Other receivables |  | 1.7 |  |  | 13.0 |
|  | 120.6 |  |  | 173.0 |
Less: allowance for credit losses and notes receivable |  | (3.6) |  |  | (9.5) |
|  | 116.9 |  |  | 163.5 |
Less: current portion |  | (83.4) |  |  | (127.9) |
Long-term receivables |  | $ | 33.5 |  |  | $ | 35.6 |
Changes in the allowance for credit losses during the nine months ended September 30, 2024 were as follows:
|  | Accounts Receivable |  | Notes Receivable, short-term |  | Notes Receivable, long-term |  | Real estate leases receivable |  | Equipment leases receivable |  | Other (1) |  | Total
|  | (In millions)
Balance, December 31, 2023 |  | $ | 2.7 |  |  | $ | 1.8 |  |  | $ | 4.7 |  |  | $ | 0.1 |  |  | $ | 0.2 |  |  | $ | 0.0 |  |  | $ | 9.5 |
Bad debt expense (credit) |  | 0.9 |  |  | (0.9) |  |  | (0.5) |  |  | 0.0 |  |  | 0.1 |  |  | — |  |  | (0.4) |
Advertising provision adjustment |  | (0.0) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 0.0 |
Write-offs |  | (0.9) |  |  | (0.6) |  |  | (3.8) |  |  | — |  |  | (0.2) |  |  | — |  |  | (5.5) |
Balance, September 30, 2024 |  | $ | 2.7 |  |  | $ | 0.3 |  |  | $ | 0.4 |  |  | $ | 0.1 |  |  | $ | 0.1 |  |  | $ | 0.0 |  |  | $ | 3.6 |
(1) Primarily gift card receivable and credit card receivable. The Company's primary credit quality indicator for all portfolio segments is delinquency. Generally, the notes receivables, leases receivables, equipment receivables, and other receivables (primarily consists of credit card receivables) are not delinquent. The year of origination of the Company's financing receivables at September 30, 2024 is as follows:
|  | Notes Receivable, short and long-term |  | Real estate leases receivable |  | Equipment leases receivable |  | Total
|  | (In millions)
2024 |  | $ | 2.7 |  |  | $ | 1.9 |  |  | $ | 0.3 |  |  | $ | 4.9 |
2023 |  | 5.2 |  |  | 3.4 |  |  | 0.7 |  |  | 9.3 |
2022 |  | 0.6 |  |  | 7.8 |  |  | — |  |  | 8.4 |
2021 |  | 0.4 |  |  | 2.2 |  |  | — |  |  | 2.6 |
2020 |  | 0.1 |  |  | 1.2 |  |  | — |  |  | 1.3 |
Prior |  | — |  |  | 2.2 |  |  | 13.8 |  |  | 16.0 |
Total |  | $ | 9.0 |  |  | $ | 18.7 |  |  | $ | 14.8 |  |  | $ | 42.5 |
The Company does not place its financing receivables in non-accrual status.

X
- References No definition available. + Details
Name: | us-gaap_CreditLossAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for credit loss on financial instrument measured at amortized cost basis, net investment in lease, off-balance sheet credit exposure, and available-for-sale debt security. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481962/310-10-50-42 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 44 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481962/310-10-50-44 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 326 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479319/326-20-50-5 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 326 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479319/326-20-50-21 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 326 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479106/326-30-50-4 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 326 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 11 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479319/326-20-50-11 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 326 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 7 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479106/326-30-50-7 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 326 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 8 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479319/326-20-50-8 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 326 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 20 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479319/326-20-50-20 + Details
Name: | us-gaap_CreditLossFinancialInstrumentTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration